Planar Announces Fiscal Fourth Quarter And Full Year 2013 Financial Results

Planar Systems, Inc. (NASDAQ: PLNR), a global leader in display and digital signage technology, recorded sales of $45.7 million and a GAAP loss per share of $0.01 in its fourth fiscal quarter ended September 27, 2013. On a Non-GAAP basis (see reconciliation table), income per share was $0.05 in the fourth quarter of fiscal 2013. Sales for fiscal year 2013 were $166.8 million and GAAP loss per share was $0.31. On a Non-GAAP basis (see reconciliation table) income per share was $0.02 in fiscal 2013.

“I am pleased with the improvement in our top and bottom line performance in the fourth quarter of 2013, which included a new high point for quarterly sales of digital signage products,” said Gerry Perkel, Planar’s President and Chief Executive Officer. “In addition, we were able to achieve our goal of Non-GAAP profitability for fiscal year 2013 and, as a result, I believe we are well positioned to continue to improve our performance as we enter fiscal year 2014.”

SUMMARY OF BUSINESS HIGHLIGHTS
  • Achieved record quarterly sales of digital signage products totaling $17.7 million in the fiscal fourth quarter of 2013, representing 30 percent growth compared with the fourth fiscal quarter of 2012
  • Recorded Non-GAAP EBITDA of $1.6 million in the fourth quarter of 2013, a $4.6 million improvement compared to the fourth quarter of 2012 (see reconciliation table)
  • Launched the Planar® Simplicity™ Series line of digital signage monitors which incorporate media playing and commercial-grade features into a sleek and affordable digital signage solution
  • Achieved record annual sales of digital signage products for fiscal year 2013 of $62.1 million, representing 42 percent growth compared with fiscal year 2012
  • Recorded Non-GAAP EBIDTA of $1.9 million in fiscal year 2013, a $12.7 million improvement compared with fiscal year 2012 (see reconciliation table)

FOURTH QUARTER FISCAL 2013 RESULTS

The Company’s total revenue increased 10 percent compared to the fourth quarter of fiscal 2012. As previously announced, the Company sold the assets comprising its Electroluminescent (EL) product line during the first quarter of fiscal 2013. Excluding revenue associated with EL products, the Company’s total revenue increased 24 percent compared with the fourth quarter of fiscal 2012. Sales of digital signage products totaled $17.7 million in the fourth fiscal quarter of 2013, a 30 percent increase from the same period a year ago. Sales of Commercial and Industrial (C&I) products increased 1 percent (20 percent without EL) to $28.0 million compared with the same quarter a year ago. This increase was primarily driven by higher sales of custom C&I displays, desktop monitors, and rear-projection cubes, offset by declines in sales of high-end home products, touch monitors and the elimination of the EL display product line.

The Company’s consolidated gross profit margin, as a percentage of sales (on a Non-GAAP basis), was 22.4 percent in the fourth quarter of 2013, up from 17.3 percent in the fourth quarter of 2012 (see reconciliation table). On a sequential basis, the Company’s Non-GAAP gross profit margin increased 0.7 percentage points as an improved mix and margin rates on sales of digital signage products and better absorption of fixed manufacturing expenses more than offset lower margins on sales of desktop monitors.

Total operating expenses (on a Non-GAAP basis) for the fourth quarter of 2013 decreased $1.4 million, or 13 percent, to $9.1 million compared with the same quarter a year ago (see reconciliation table), as expenses declined as a result of previously implemented cost reduction measures and the divestiture of the EL product line. Also, the Company recorded a $0.7 million restructuring charge in the fourth fiscal quarter of 2013 related to the consolidation of some of its European administrative functions.

The Company’s cash balance decreased $1.4 million sequentially to $12.0 million at the end of the fourth fiscal quarter of 2013 compared to the end of the third quarter of fiscal 2013. The decrease in cash was primarily caused by an increase in accounts receivable as result of strong sequential sales growth, partially offset by the quarterly Non-GAAP profit, increases in accounts payable and decreases in inventory.

BUSINESS OUTLOOK

As the Company looks out into fiscal year 2014, its goals remain unchanged; continue to grow sales of digital signage products in an effort to drive overall revenue growth for the Company and improved profitability. As a result, the Company currently anticipates revenue in the range of $41-43 million and Non-GAAP income per share of $0.02 to $0.04 in the first fiscal quarter of 2014. For the full fiscal year, the Company expects revenue in the range of $170-180 million and Non-GAAP income per share of $0.10 to $0.15.

Results of operations and the business outlook will be discussed in a conference call today, November 20, 2013, beginning at 2:00 PM Pacific Time. The call can be heard via the Internet through a link on Planar’s website, www.planar.com, or through numerous other investor sites, and will be available for replay until December 20, 2013. The Company intends to post on its website a transcript of the prepared management commentary from the conference call shortly after the conclusion of the call.

ABOUT PLANAR

Planar Systems Inc. (NASDAQ: PLNR) is a global leader in display and digital signage technology, providing premier solutions for the world's most demanding environments. Retailers, educational institutions, government agencies, businesses, utilities and energy firms, and home theater enthusiasts all depend on Planar to provide superior performance when image experience is of the highest importance. Planar video walls, large format LCD displays, interactive touch screen monitors and many other solutions are used by the world’s leading organizations in applications ranging from digital signage to simulation and from interactive kiosks to large-scale data visualization. Founded in 1983, Planar is headquartered in Oregon, USA, with offices, manufacturing partners and customers worldwide. For more information, visit www.planar.com.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 relating to Planar’s business operations and prospects, including statements relating to the Company’s improved performance in fiscal 2014 and statements under the “Business Outlook” heading relating to expected levels of revenue, and Non-GAAP earnings/profitability for the first quarter and full fiscal year in 2014. These statements are made pursuant to the safe harbor provisions of the federal securities laws. These and other forward-looking statements, which may be identified by the inclusion of words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “goal” and variations of such words and other similar expressions, are based on current expectations, estimates, assumptions and projections that are subject to change, and actual results may differ materially from the forward-looking statements. These statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict. Many factors, including the following, could cause actual results to differ materially from the forward-looking statements: poor or weakened domestic and international business and economic conditions; changes or reductions in the demand for products in the various display markets served by the Company; any delay in the timing of customer orders or the Company’s ability to ship product upon receipt of a customer order; the extent and timing of any additional expenditures by the Company to address business growth opportunities; any inability to reduce costs or to do so quickly enough, in either case, in response to reductions in revenue; adverse impacts on the Company or its operations relating to or arising from any inability to fund desired expenditures, including due to difficulties in obtaining necessary financing; changes in the flat-panel monitor industry; changes in customer demand or ordering patterns; changes in the competitive environment including pricing pressures, increased commoditization or the ability to keep pace with technological changes; technological advances; shortages of manufacturing capacity from the Company’s third-party manufacturing partners or other interruptions in the supply of components the Company incorporates in its finished goods including as a result of natural disasters; future production variables resulting in excess inventory and other risk factors listed from time to time in the Company’s periodic filings with the Securities and Exchange Commission (SEC). The forward-looking statements contained in this press release speak only as of the date on which they are made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this press release.

Note Regarding the Use of Non-GAAP Financial Measures:

In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (GAAP), the Company's earnings release contains Non-GAAP financial measures that exclude share-based compensation and the requirements of Topic 718 of the FASB Accounting Standards Codification TM, “Compensation-Stock Compensation”. The Non-GAAP financial measures also exclude impairment and restructuring charges, gains or losses on the sale of assets, the amortization of intangible assets related to previous acquisitions, various tax charges including the valuation allowance against deferred tax assets, the gain or loss on foreign currency due to the non-cash nature of the charge, and various other adjustments. The Non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. The Non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. The Company has provided reconciliations of the Non-GAAP financial measures to the most directly comparable GAAP financial measures.
 
Planar Systems, Inc.
Consolidated Statement of Operations
(In thousands, except per share amounts)
(unaudited)
         
Three months ended Twelve months ended
Sept. 27, 2013   Sept. 28, 2012 Sept. 27, 2013   Sept. 28, 2012
 
Sales $ 45,708 $ 41,400 166,809 171,354
Cost of Sales   35,500       34,291     129,454       136,718  
Gross Profit 10,208 7,109 37,355 34,636
 
Operating Expenses:
Research and development, net 1,502 2,787 6,977 10,592
Sales and marketing 4,672 5,180 19,595 24,842
General and administrative 3,253 3,040 12,412 13,987
Amortization of intangible assets 123 171 565 696
Restructuring 732 404 3,333 922
Loss (gain) on sale of assets   -       -     1,314       -  
Total Operating Expenses 10,282 11,582 44,196 51,039
 
Income (Loss) from operations (74 ) (4,473 ) (6,841 ) (16,403 )
 
Non-operating income (expense):
Interest, net 53 (22 ) 157 (15 )
Foreign exchange, net (236 ) (44 ) (250 ) 479
Other, net   (22 )     49     440       499  
Net non-operating income (expense) (205 ) (17 ) 347 963
 
Income (loss) before taxes (279 ) (4,490 ) (6,494 ) (15,440 )
Provision (benefit) for income taxes   (72 )   138     42     742  
Net Income (loss) $ (207 )   $ (4,628 ) $ (6,536 )   $ (16,182 )
 
Net Income (loss) per share - basic ($0.01 ) ($0.23 ) ($0.31 ) ($0.81 )
Net Income (loss) per share - diluted ($0.01 ) ($0.23 ) ($0.31 ) ($0.81 )
 
Weighted average shares outstanding - basic 21,010 20,258 20,757 20,083
Weighted average shares outstanding - diluted 21,010 20,258 20,757 20,083
 
 
Planar Systems, Inc.
Consolidated Balance Sheets
(In thousands)
(unaudited)
   
Sept. 27, 2013 Sept. 28, 2012
ASSETS
Cash $ 11,971 $ 17,768
Accounts receivable, net 22,821 18,604
Inventories 30,003 31,984
Other current assets   2,426     2,829  
Total current assets 67,221 71,185
 
Property, plant and equipment, net 6,434 3,554
Intangible assets, net - 565
Other assets   6,230     6,580  
$ 79,885   $ 81,884  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable 17,042 11,686
Current portion of capital leases 759 449
Deferred revenue 1,685 1,659
Other current liabilities   12,848     15,915  
Total current liabilities 32,334 29,709
 
Long-term portion of capital leases 394 545
Other long-term liabilities   5,390     5,111  
Total liabilities 38,118 35,365
 
Common stock 186,202 184,556
Retained earnings (deficit) (141,735 ) (134,751 )
Accumulated other comprehensive loss   (2,700 )   (3,286 )
Total shareholders' equity   41,767     46,519  
$ 79,885   $ 81,884  
 
 
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, unaudited)
         
For the three months ended
Sept. 27, 2013 Sept. 28, 2012
Gross Profit:
GAAP gross profit 10,208 7,109
 
Share-based compensation 9   34  
Total Non-GAAP adjustments 9   34  
   
NON-GAAP GROSS PROFIT 10,217   7,143  
   
NON-GAAP GROSS PROFIT PERCENTAGE 22.4 % 17.3 %
 
Research and Development:
GAAP research and development expense 1,502 2,787
 
Share-based compensation (9 ) (45 )
Total Non-GAAP adjustments (9 ) (45 )
   
NON-GAAP RESEARCH AND DEVELOPMENT EXPENSE 1,493   2,742  
 
Sales and Marketing:
GAAP sales and marketing expense 4,672 5,180
 
Share-based compensation (39 ) (90 )
Total Non-GAAP adjustments (39 ) (90 )
   
NON-GAAP SALES AND MARKETING EXPENSE 4,633   5,090  
 
General and Administrative:
GAAP general and administrative expense 3,253 3,040
 
Share-based compensation (245 ) (370 )
Total Non-GAAP adjustments (245 ) (370 )
   
NON-GAAP GENERAL AND ADMINISTRATIVE EXPENSE 3,008   2,670  
 
Operating Expenses:
GAAP total operating expenses 10,282 11,582
 
Share-based compensation (293 ) (505 )
Amortization of intangible assets (123 ) (171 )
Restructuring charges (732 ) (404 )
Total Non-GAAP adjustments (1,148 ) (1,080 )
   
NON-GAAP TOTAL OPERATING EXPENSES 9,134   10,502  
 
 
Reconciliation of GAAP to Non-GAAP Financial Measures Continued
(In thousands, unaudited)
         
For the three months ended
Sept. 27, 2013 Sept. 28, 2012
 
Income (Loss) from Operations:
GAAP income (loss) from operations (74 ) (4,473 )
 
Share-based compensation 302 539
Amortization of intangible assets 123 171
Restructuring charges   732   404  
Total Non-GAAP adjustments   1,157   1,114  
   
NON-GAAP INCOME (LOSS) FROM OPERATIONS   1,083   (3,359 )
 
Income (Loss) before taxes & EBITDA:
GAAP income (loss) before taxes (279 ) (4,490 )
 
Share-based compensation 302 539
Amortization of intangible assets 123 171
Restructuring charges 732 404
Foreign exchange, net   236   44  
Total Non-GAAP adjustments   1,393   1,158  
   
NON-GAAP INCOME (LOSS) BEFORE TAXES   1,114   (3,332 )
Depreciation   500   383  
NON-GAAP EBITDA   1,614   (2,949 )
 
Net Income (Loss):
GAAP net income (loss) (207 ) (4,628 )
 
Share-based compensation 302 539
Amortization of intangible assets 123 171
Restructuring charges 732 404
Foreign exchange, net 236 44
Income tax effect of reconciling items   (185 ) 1,388  
Total Non-GAAP adjustments   1,208   2,546  
   
NON-GAAP NET INCOME (LOSS)   1,001   (2,082 )
 
GAAP weighted average shares outstanding--basic 21,010 20,258
NON-GAAP weighted average shares outstanding--diluted 21,708 20,258
 
GAAP Net Income (Loss) per share - basic ($0.01 ) ($0.23 )
Non-GAAP adjustments detailed above 0.06 0.13
NON-GAAP NET INCOME PER SHARE (basic) $ 0.05 ($0.10 )
 
GAAP Net Income (Loss) per share - diluted ($0.01 ) ($0.23 )
Non-GAAP adjustments detailed above 0.06 0.13
NON-GAAP NET INCOME PER SHARE (diluted) $ 0.05 ($0.10 )
 
 
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, unaudited)
         
For the twelve months ended
Sept. 27, 2013 Sept. 28, 2012
Gross Profit:
GAAP gross profit 37,355 34,636
 
Share-based compensation 84   102  
Total Non-GAAP adjustments 84   102  
   
NON-GAAP GROSS PROFIT 37,439   34,738  
   
NON-GAAP GROSS PROFIT PERCENTAGE 22.4 % 20.3 %
 
Research and Development:
GAAP research and development expense 6,977 10,592
 
Share-based compensation (91 ) (144 )
Total Non-GAAP adjustments (91 ) (144 )
   
NON-GAAP RESEARCH AND DEVELOPMENT EXPENSE 6,886   10,448  
 
Sales and Marketing:
GAAP sales and marketing expense 19,595 24,842
 
Share-based compensation (251 ) (203 )
Total Non-GAAP adjustments (251 ) (203 )
   
NON-GAAP SALES AND MARKETING EXPENSE 19,344   24,639  
 
General and Administrative:
GAAP general and administrative expense 12,412 13,987
 
Share-based compensation (1,036 ) (1,155 )
Total Non-GAAP adjustments (1,036 ) (1,155 )
   
NON-GAAP GENERAL AND ADMINISTRATIVE EXPENSE 11,376   12,832  
 
Operating Expenses:
GAAP total operating expenses 44,196 51,039
 
Share-based compensation (1,378 ) (1,502 )
Amortization of intangible assets (565 ) (696 )
Restructuring charges (3,333 ) (922 )
Loss (gain) on sale of assets (1,314 ) -  
Total Non-GAAP adjustments (6,590 ) (3,120 )
   
NON-GAAP TOTAL OPERATING EXPENSES 37,606   47,919  
 
 
Reconciliation of GAAP to Non-GAAP Financial Measures Continued
(In thousands, unaudited)
         
For the twelve months ended
Sept. 27, 2013 Sept. 28, 2012
 
Income (Loss) from Operations:
GAAP income (loss) from operations (6,841 ) (16,403 )
 
Share-based compensation 1,462 1,604
Amortization of intangible assets 565 696
Restructuring charges 3,333 922
Loss (gain) on sale of assets   1,314   -  
Total Non-GAAP adjustments   6,674   3,222  
   
NON-GAAP INCOME (LOSS) FROM OPERATIONS   (167 ) (13,181 )
 
Income (Loss) before taxes & EBITDA:
GAAP income (loss) before taxes (6,494 ) (15,440 )
 
Share-based compensation 1,462 1,604
Amortization of intangible assets 565 696
Restructuring charges 3,333 922
Loss (gain) on sale of assets 1,314 -
Foreign exchange, net   250   (479 )
Total Non-GAAP adjustments   6,924   2,743  
   
NON-GAAP INCOME (LOSS) BEFORE TAXES   430   (12,697 )
Depreciation   1,515   1,977  
NON-GAAP EBITDA   1,945   (10,720 )
 
Net Income (Loss):
GAAP net income (loss) (6,536 ) (16,182 )
 
Share-based compensation 1,462 1,604
Amortization of intangible assets 565 696
Restructuring charges 3,333 922
Loss (gain) on sale of assets 1,314 -
Foreign exchange, net 250 (479 )
Income tax effect of reconciling items   (1 ) 5,503  
Total Non-GAAP adjustments   6,923   8,246  
   
NON-GAAP NET INCOME (LOSS)   387   (7,936 )
 
GAAP weighted average shares outstanding--basic 20,757 20,083
NON-GAAP weighted average shares outstanding--diluted 21,282 20,083
 
GAAP Net Income (Loss) per share - basic ($0.31 ) ($0.81 )
Non-GAAP adjustments detailed above 0.33 0.41
NON-GAAP NET INCOME (LOSS) PER SHARE (basic) $ 0.02 ($0.40 )
 
GAAP Net Income (Loss) per share - diluted ($0.31 ) ($0.81 )
Non-GAAP adjustments detailed above $ 0.33 0.41
NON-GAAP NET INCOME (LOSS) PER SHARE (diluted) $ 0.02 ($0.40 )
 
 
Planar Systems, Inc.
Revenue by Product Line
(In millions)
(unaudited)
             
Three months ended % Change vs.
Sept. 27, 2013   Sept. 28, 2012   Jun. 28, 2013 Prior Year   Prior Quarter
 
Digital Signage Sales $ 17.7 $   13.6 $   14.1 30 % 26 %
 
Commercial & Industrial Sales 28.0 27.8 23.4 1 % 20 %
Desktop Monitors 11.2 7.8 9.2 43 % 21 %
Rear Projection Cubes 4.9 4.2 3.5 17 % 42 %
Touch Monitors 4.6 5.2 5.0 -12 % -9 %
High-end Home 2.0 3.2 2.2 -38 % -10 %
Custom Commercial & Industrial 5.1 2.3 3.3 128 % 55 %
Electroluminescent (1) - 4.3 - -100 % -
Other (1) 0.2 0.8 0.2 -61 % 24 %
               
Total Sales $ 45.7   $   41.4   $   37.5 10 %   22 %
Electroluminescent and custom glass (1)   -       4.3       - -100 %   -  
Total Sales without Electroluminescent $ 45.7   $   37.1   $   37.5 24 %   22 %
 

(1)

 
In the first quarter of 2013, the Company sold the assets and liabilities related to the Electroluminescent product line, including custom glass, which was included in other commercial & industrial sales.
 
 
Planar Systems, Inc.
Revenue by Product Line
(In millions)
(unaudited)
       
Twelve months ended % Change
Sep. 27, 2013   Sep. 28, 2012 vs. Prior Year
 
Digital Signage Sales $ 62.1 $ 43.8 42 %
 
Commercial & Industrial Sales 104.7 127.6 -18 %
Desktop Monitors 38.0 35.1 9 %
Rear Projection Cubes 20.8 26.2 -21 %
Touch Monitors 19.8 16.1 23 %
High-end Home 9.7 15.6 -38 %
Custom Commercial & Industrial 13.1 11.9 10 %
Electroluminescent (1) 2.3 19.8 -88 %
Other (1) 1.0 2.9 -65 %
       
Total Sales $ 166.8   $ 171.4 -3 %
Electroluminescent and custom glass (1)   2.3     20.0 -89 %
Total Sales without Electroluminescent $ 164.5   $ 151.4 9 %
 

(1)

 
In the first quarter of 2013, the Company sold the assets and liabilities related to the Electroluminescent product line, including custom glass, which was included in other commercial & industrial sales.
 

Copyright Business Wire 2010

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